Question
Assume that the South African Rand offers a six-month interest rate of 6%, while the British pound offers a six-month interest rate of 5%. From
Assume that the South African Rand offers a six-month interest rate of 6%, while the British pound offers a six-month interest rate of 5%. From a UK investor's perspective, the British pound is the home currency. According to IRP, ______.
Select one:
a. the rand should exhibit a forward premium of 0.943% over the six months.
b. the rand should exhibit a forward discount of 0.943% over the six months.
c. the rand should exhibit a forward premium of 0.952% over the six months.
d. the rand should exhibit a forward discount of 0.952% over the six months.
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